The future of urban America in the global economy

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The future of urban America in the global economy
American Planning Association. Journal of the American Planning Association; Chicago; Spring 1996; Stegman, Michael A; Turner, Margery Austin;





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Subject Terms: 

Urban development
Suburban areas
Economic activity
Public policy
Metropolitan areas
International trade
Economic indicators

Classification Codes: 

9190: US
9180: International
1200: Social policy
1110: Economic conditions & forecasts

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Throughout the world, the integration of the global market place is causing a fundamental shift in the way nations think about urban economies. Today's metropolitan regions, though strongly interdependent, compete with one another and with urban centers throughout the world. Although cities and their suburbs may regard each other as rivals in a zero-sum struggle to capture economic growth, they are also partners in interregional competition to sell goods and services in national and global markets. Recent evidence strongly indicates that the overall economic performance of metropolitan regions is linked to the performance of their central cities; cities and their suburbs tend to rise or fall together. Thus, the ability of a nation to prosper in today's global economy will depend upon the economic performance of its urban regions and upon the health and vitality of the cities at their core.

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Copyright American Planning Association Spring 1996

America's metropolitan regions are the engines of our national economy. Today, eight out of ten Americans live in one of 330 metropolitan areas, and more than half live in the 39 metropolitan areas with populations of one million or more.1 Urban economies account for 83 percent of national income and virtually all employment in the advanced technical and service sectors of the future. Cities are the great democratizers of American society, where people of different cultures and languages meet, mix, and work together. They provide opportunities for young people entering the labor market and the larger society for the first time, for immigrants from other countries, and for people moving from one part of the country to another. And America's great cities harbor and nurture this nation's innovative genius. Science and technology, art and fashion, entertainment, banking and finance, research and higher education--these activities all flourish in the creative and intellectual ferment that characterizes metropolitan centers.

Throughout the world, the integration of the global marketplace is causing a fundamental shift in the way nations think about urban economies. The United States economy is increasingly a system of metropolitan-centered regional economies that transcend municipal boundaries (and even state lines).2 We used to think of our country as relatively homogeneous, with all of its regions rising or falling together with the national economic tide. But today it makes more sense to think of a "common market" of metropolitan economies.3 These metropolitan regions, though strongly interdependent, compete with one another and with urban centers throughout the world. Today, Detroit's real competition is not its suburbs, but the metropolitan regions of BadenWurtemburg in Germany and Kyushu in Japan.4

Some people have speculated that the rise of global technology and information networks might erode many of downtown's traditional economic functions, with computers and other forms of interactive communication reducing the need for face-to-face contact in centralized office districts. Increasingly, however, experts recognize that the concentration of expertise and economic interchange that occurs in dense urban centers is critical to the knowledge-intensive industries of the future.5

Although cities and their suburbs may regard each other as rivals in a zero-sum struggle to capture economic growth, they are also partners in interregional competition to sell goods and services in national and global markets. Recent evidence strongly indicates that the overall economic performance of metropolitan regions is linked to the performance of their central cities; cities and their suburbs tend to rise--or fall--together.6 Thus, the ability of a nation to prosper in today's highly competitive global economy will depend upon the economic performance of its urban regions and upon the health and vitality of the cities at their core.7

Our Cities Are in Trouble

For many years, America's cities have been in serious trouble. As urban growth has extended the boundaries of metropolitan areas outward, poor families and poor inner-city neighborhoods have become disconnected from the opportunities and prosperity of their regions, the nation, and the emerging global economy. In 1990 the suburbs constituted nearly 60 percent of the United States metropolitan population. Between 1980 and 1990, the rate of population growth in the suburbs more than doubled the central cities' pace. And between 1977 and 1987, two-thirds of net employment growth in America's sixty largest metropolitan areas was located in the suburbs. Over the same period, the suburbs captured 120 percent of the net job growth in manufacturing, while central cities suffered absolute losses in manufacturing employment."

One byproduct of America's steady suburbanization has been growing disparities between the jurisdictions that make up urban regions. Although metropolitan regions are highly interconnected in terms of labor, housing, capital, and consumer markets, many are fragmented politically. Suburban jurisdictions tend to compete vigorously with one another and with the central city for new sources of growth to keep treasuries full and tax rates low. While poorer jurisdictions are under tremendous pressure to expand services for their needy residents, voters in the more affluent suburban jurisdictions have strong incentives to support land-use regulations and growth controls that maximize property values by discouraging lower-income households from moving into their communities.9 Poor people--and especially poor minorities--are essentially trapped in inner cities and older suburbs.

Discrimination in urban housing markets perpetuates disparities between jurisdictions within metropolitan regions. More than a quarter of a century after the passage of the Fair Housing Act, minority homeseekers routinely face discrimination when they search for housing. They are told about fewer available units than are comparable white homeseekers, provided with less information and assistance, and steered away from affluent white neighborhoods. In fact, African American and Hispanic homeseekers who visit real estate or rental agents to ask about housing advertised in the newspaper experience discrimination almost 50 percent of the time.l0

Because of the persistence of discrimination in housing, American communities remain profoundly divided on the basis of race and ethnicity. Most African Americans and Hispanics live in neighborhoods that are predominantly minority, while most whites live in neighborhoods that are predominantly or even exclusively white.1l And because minorities experience higher poverty rates than whites do, the spatial concentration of minorities also concentrates poverty and compounds its social costs.12

As jobs, wealth, and economic opportunities have migrated outward, poor minority communities in the central city (and in older suburbs) have become increasingly isolated from the opportunities and prosperity of their metropolitan regions, the nation, and the emerging global economy.l3 Most jobs in the American labor market today are filled through employee referrals, direct application at the work site, and other informal mechanisms. Vacancies are not widely publicized, and job seekers need personal recommendations from people that prospective employers trust. Thus, inner-city residents face real barriers to finding employment in the suburban areas where job opportunities are expanding fastest.l4 Recent evidence also indicates that minority job seekers face discrimination in urban labor markets. Young black men applying for entry-level jobs in Washington, DC and Chicago received less favorable treatment than did equally qualified white applicants about 20 percent of the time, and Hispanic job applicants in Chicago and San Diego were treated less favorably than comparable whites were almost 30 percent of the time.l5

Stark contrasts now exist between central cities and their surrounding suburbs.l6 As of 1990, median income levels in central city jurisdictions were almost 30 percent lower than in the suburbs, and the poverty rate was 18 percent, compared to only 8.1 percent in the suburbs. Disparities between cities and suburbs are even greater in the largest metropolitan areas of the Northeast and Midwest. For example, in New York City, almost one in five people (19.2 percent) live in poverty, nearly three times the suburban poverty rate (6.5 percent). And the poverty rate is a staggering 30.2 percent in Detroit, compared to only 6.2 percent in the surrounding suburbs.

Poverty is further concentrated within central cities. Between 1970 and 1990, the number of people living in areas of concentrated poverty (where over 40 percent of the residents are poor) grew from 3.8 million to 10.4 million.l7 In 1990, 11 percent of the population of the nation's 100 largest cities lived in these extreme-poverty neighborhoods, compared to 8 percent in 1980 and 5 percent in 1970. Within such severely distressed neighborhoods, social conditions are bleak:l8

* More than 60 percent of families with children are headed by single women, compared to less than 20 percent in nonpoverty neighborhoods.

* More than half of all adults have less than a high school education, compared to less than 20 percent in nonpoverty neighborhoods.

* More than 40 percent of working-age men are unemployed, compared to just over 19 percent in nonpov erty neighborhoods in the central city.

* Almost one in five youths of ages 16 to 19 are high school dropouts, compared to about one in ten in nonpoverty neighborhoods.

* One in three households receive welfare benefits, compared to only 11 percent of all central city households.

In these high-poverty neighborhoods, the problems of poor education, discrimination, joblessness, teen pregnancy, single parenthood, drug abuse, and crime all reinforce one another, perpetuating a vicious cycle of poverty, inequality, violence, and despair.19

High-poverty neighborhoods cannot support the businesses and civic institutions necessary for a healthy community. Retail businesses close down, employers move elsewhere, and civic and religious institutions find it impossible to survive. The city of Los Angeles has lost a third of its supermarkets since 1970; Boston has lost two-thirds. Beginning in the late 1980s, the Roman Catholic Church closed 40 parishes in downtown Chicago and 32 in Detroit. Nationally, 50 to 60 Catholic schools have closed annually in recent years.20 As central city neighborhoods lose their economic and civic infrastructure, middle-income and working families have fewer and fewer reasons to remain.

The concentration of poverty and the suburbanization of wealth converge on central city treasuries, where a declining tax base collides with rising public sector costs. Cities with high poverty rates face high per capita expenditures for welfare, hospitals and other public health services. But high levels of poverty also raise the cost of other city functions, such as police, fire, and education. And as a result, the total public costs that must be covered by nonpoor taxpayers are greater in high-poverty cities than elsewhere. For example, the problems of homelessness, AIDS, and crack abuse--all phenomena that barely existed before 1980--have had a devastating impact on city budgets. Analysis of expenditures in selected central-city jurisdictions shows that per capita spending on povertyrelated functions averaged $124 in low-poverty cities, but $277 in high-poverty cities. All other expenditures totaled $656 per nonpoor person in the low-poverty cities, compared to $1,040 per nonpoor person in the high-poverty cities.2l

This situation yields a disastrous set of secondary effects, which further exacerbate the downward spiral of poverty concentration and fiscal distress. First, nonpoor families and businesses--already discouraged from locating in the central city by high crime and poor schools--are inclined to leave to escape the increasing tax burden. This further erodes the tax base and puts enormous pressure on local governments to reduce expenditures, cutting the quality and scope of public services to poor and nonpoor residents alike, and making the central city an even less attractive place to live, work, and invest. Central city governments--some of which are bloated and inefficient--fail to deliver the decent schools, public safety, and other services that families and businesses need and expect.

The Problems of Our Cities Affect Us All

The vicious cycle of poverty concentration, social despair, and fiscal distress that plagues much of urban America today weakens our nation's economic health and undermines the ability of metropolitan regions to compete in the global economy. Moreover, isolation of the poor in distressed, high-poverty neighborhoods saps America's spirit, weakening the bonds of trust and common purpose. If these problems continue to go unaddressed, America's future could be severely compromised, both economically and socially, in ways that we are only beginning to understand.

The distress and decline of high poverty areas do not remain confined to the central city, but gradually spread out to affect suburban areas as well. Older suburbs-and even some "edge cities"--increasingly find themselves in competition with newer areas of development that can attract more affluent families, retail centers, and jobs. To illustrate: Lakewood, Ohio, Cleveland's oldest suburb, declined in population from 70,000 in 1980 to 60,000 in 1990. Today, nearly ten percent of its residents receive welfare assistance of some kind, and the community is experiencing an increase in teen pregnancies and juvenile crime. Older residents, opposed to increases in property tax rates, have voted down tax levies for the local public schools four times since 1993, resulting in an anticipated million-dollar deficit for the 1995-96 school year.22

Central city decline is also a problem for us all because it can paralyze metropolitan growth and development.23 Streets full of potholes, boarded-up buildings, failing public services, poorly educated workers, homeless people camped out in public parks, and high crime rates all damage the image and economic viability of a central city and, by extension, the entire metropolitan region. These problems translate into high costs and risks in the minds of business managers looking for places to locate, and the flow of new capital slows to a trickle.

To thrive, metropolitan regions need economically vital central cities. Despite the increasing trend toward decentralization of many types of business and employment, clusters of highly skilled labor and valueadded firms are still critical to knowledge-based producer services, such as market and financial analysts, strategic planners, lawyers, marketing specialists, high-level accountants, and computer systems designers. Metropolitan economies increasingly depend upon such clusters of economic activity if they are to thrive in the new economy. This is the important competitive advantage that central cities must exploit.24

Communication and transactions costs are minimized in these clusters of knowledge-intensive firms and workers. Proximity is critically important to the success of activities where keeping up with the most recent developments in the field is essential, and where interpersonal transactions are intense. At the highest levels, these activities demand opportunities for the frequent face-to-face interaction among knowledgeable people that proximity affords. Wall Street and Silicon Valley both provide good examples of how the spatial concentration of workers in a particular field facilitates the flow of information and may lead to important leaps forward in knowledge and productivity. Cutting-edge ideas are generated and transmitted most effectively when people with different types of expertise have rapid and easy access to one another.25

Spatial concentration also facilitates technical specialization. Every suburban office park cannot support an expert on the legal complexities of doing business in China, for example. But every large metropolitan region probably needs at least one such expert, and downtown is normally the most efficient place for such expertise to be located. Analysis of business transactions in New York, Los Angeles, and Chicago confirms that both central-city and suburban firms rely overwhelmingly on central-city providers of specialized business services such as investment banking and legal counsel.26

Considerable research now documents strong statistical relationships between metropolitan economic performance and city-suburban disparities.27 For example, data on 56 large metropolitan regions show a strong correlation between metropolitan-wide employment growth and the ratio of central-city to suburban income. More specifically, employment grew most where income disparities were lowest.28 Although the evidence of a causal connection is not yet conclusive, there are strong reasons to believe that the social and fiscal distress of high-poverty central cities impedes the growth of the specialized producer service activities that drive metropolitan economies.

Moreover, the costs to our economy of extreme spatial dispersion and inner-city abandonment are high. Because metropolitan regions sprawl across such large areas of land, the United States has had to build and maintain infrastructure networks that are far more extensive than those of its competitors in the global economy. Acreage in new development has been increasing 86 to 100 times faster than population has in Chicago, New York, the DC-Baltimore region, Dallas-Fort Worth, Atlanta, San Francisco, and other regions.29 And as development extends outward, existing infrastructure in central cities goes underutilized; since 1950, the metropolitan population of the United States has almost doubled, but the population density in its central cities has fallen by half.30

An even greater threat to our economic future is the failure of inner-city school systems to adequately educate large numbers of the nation's children. In the highly technical, knowledge-based industries of the future, education is the key to individual and collective success. "America's economic and global primacy depends on the success of the children now being educated in our city schools. They are, after all, the next generation of citizens, workers and voters."31 Concentrated poverty not only reduces the resources available for education through its drain on a jurisdiction's tax base; it also increases the resources needed (per child) to provide an effective education. Today inner-city schools are often "chaotic and ineffective for all their students."32 To understand the challenges facing inner-city schools today, consider this description of the students in the Hartford public school system: "In a typical class of 23 students . . . an average of 21 students are either Black or Hispanic; 3 were born to mothers on drugs, 5.3 to teen mothers; 3 were born underweight; 8.4 live in poverty; 14.9 live with a single parent; 9.2 have parents with less than a high school education; 8.2 live in households where more than 30 percent of the income is spent on housing costs, 4.6 in a home where a language other than English is spoken, 9.5 in households where a member is involved in criminal activity; and 9.2 live with parents who are not in the labor force."33

The educational achievement of public school students in inner cities is well below that of their peers in more affluent communities. The 1992 National Assessment of Educational Progress, for example, indicates that three-quarters of fourth graders in disadvantaged urban areas were reading below basic skill levels, and fewer than six percent were rated as proficient or advanced. In more affluent urban school districts, only 18 percent of fourth graders were reading below basic skill levels, and 60 percent were rated as proficient or advanced.34 Math and science scores showed similar disparities. Yet inner-city students represent a substantial share of tomorrow's workforcepublic school districts of central cities are educating almost one in three American youth.35

In addition to the economic costs of concentrated poverty, the polarization of urban communities today is exacting a high social and civic toll. The crime and violence of distressed neighborhoods have made suburbanites increasingly afraid of the central city and its residents. At the same time, the isolation of poor central-city residents--especially poor minorities-- from mainstream institutions and opportunities in the metropolitan area engenders alienation and hostility. This widespread breakdown of trust and reciprocity among major segments of society poses a fundamental threat to our cherished democracy. It threatens civic engagement, interferes with communication and collaboration, and undermines the capacity of public and private institutions to solve our common problems.36 "Some neighborhoods in this nation are so violent and menacing that terms such as community building and shared civic values are meaningless. No community organization can thrive on streets where children murder each other without remorse and where gangs, drugs, and violence have replaced family, work, and the rule of law."37

New Directions for Urban Policy

The problems facing urban America today are severe, and their potential consequences are frightening. But these problems are by no means insurmountable. The United States remains a tremendously wealthy nation, and the work ethic persists as a fundamental norm even in the most distressed communities. For example, in central Harlem, where 40 percent of the population is poor, two-thirds of all households have at least one full-time worker, and 14 people apply for every minimum-wage job opening.38

Moreover, although poverty concentrations and distress may overwhelm some central city jurisdictions, these problems appear less daunting when viewed in the context of whole metropolitan regions. Hartford, the capital of Connecticut, has become one of America's most distressed cities. Between 1950 and 1990 the city's population dropped 21 percent to 139,000. In 1989 the average income of city residents was 53 percent of suburban residents', and over 27 percent of Hartford's population was poor. Crime rates have soared, and school failure rates were so high that the city's school board brought in a private management company to run the public school system. Seen as "the city's problem," Hartford's social agony seems unsolvable. Yet, when viewed from a regional perspective, problems facing the one million people of the Hartford metropolitan area are not so insurmountable; of every 100 residents, only 3 are poor and white, 2 are poor and Hispanic, and fewer than 2 are poor and African American. The problem is not the region's overall level of poverty--only 7 out of every 100 residents are poor--but its high concentration in innercity areas. America is not a Third World country where the poor are many and the middle class are few. In America the middle class are many and the poor are few. This country has the capacity to end the isolation of the poor and to address the decline of central cities.

If the wealth of our nation depends on the health of metropolitan regions, then we must strive to ensure regional vitality by converting the potential competitive advantage of cities into vigorous economic growth that creates jobs, opportunity, and hope for all their residents. This is the central challenge of urban policy today. To meet this challenge, all of us must unite in community-led efforts to revitalize distressed urban neighborhoods and reconnect their residents to the opportunities and the obligations of American society. Creating sustained economic growth with low inflation is the foundation for an effective national urban policy. Without such growth, the private sector cannot produce a sufficient supply of good jobs to grow and sustain a strong middle class. However, the experience of the 1980s demonstrates that a growing economy does not automatically raise all incomes. Without targeted public investment, even a booming national economy will leave too many distressed communities untouched and too many Americans mired in poverty and disillusionment, exacting a severe toll on regional economic productivity. Failure to effectively address these problems could impair our ability to compete effectively in the global economy of the future. That is why urban initiatives must bridge the divide between poor people living in distressed communities and the economic opportunities in the larger metropolitan marketplace.

The public, private, and non-profit sectors, at federal, state, and local levels all have critical roles to play in building these bridges. But they must recognize that the most pressing problems facing older cities and suburbs today are not the result of periodic recessions or the rhythms of the business cycle. Thus, they cannot be addressed merely through short-term countercyclical measures. The global economic transformations taking place today are fundamental and long-lasting. Effective urban policy must respond in kind, rebuilding the long-term competitiveness of cities and metropolitan regions through strategic investments in both human and physical capital.

In addition, it is time to move beyond the false choice between empowering poor people or revitalizing distressed places. Both types of assistance play critical roles in connecting poor people to jobs and opportunity. People-oriented policies, such as the expansion of the Earned Income Tax Credit or increasing the minimum wage, will enhance the incomes of low-wage workers wherever they live, but will also yield important place-based benefits because of the spatial concentration of beneficiaries in distressed communities. Similarly, efforts to connect inner-city residents to jobs in the regional economy will increase family incomes and stimulate demand for local goods and services, thereby catalyzing retail development in the urban core. Correspondingly, place-based initiatives-such as targeted business and housing development in inner-city neighborhoods-will fail unless they address the specific needs of individual residents, such as education and training. In other words, placebased strategies must be integrated with peopleoriented initiatives to be effective.

Finally, if we are to bring new life to our inner cities, we must engage in meaningful collaboration and joint problem-solving at the regional level. This is critical for three reasons. First, the costs of inner-city problems are borne by taxpayers everywhere. According to one estimate, for example, "the damage to large urban economies from crime alone is $50 billion annually; special federal expenditures for inner cities adds another $75 billion."39 Second, many suburban communities are developing socioeconomic problems similar to those of central cities, but with even fewer resources to assist their increasingly dependent populations. Thus, efforts aimed at combating distress must not be limited to central cities. And finally, if we are to face the economic realities of the future, we must acknowledge that many suburban employment centers will continue to grow as important sources of jobs in the metropolitan region for both suburban and central-city residents. Because metropolitan regions represent the new geography of opportunity for tens of millions of Americans, national urban policies must encourage metropolitan-wide approaches to economic development.

Working together, we have the capacity to end the isolation of the poor and to address the decline of central cities. And it is in all of our interests to do so. America's cities can prosper in the new global economy; their citizens can enjoy unprecedented new opportunities; those who have been left out can enter the mainstream of our economic and social life. But these gains will not be achieved by ignoring the problems of the inner city or by trying to turn back the clock. Instead, we must recognize and capitalize on the new global economic realities facing cities today.

1. The nation's five largest metropolitan regions-New York, Los Angeles, Chicago, San Francisco, and Philadelphia-are home to one-fifth of the total U.S. population. Henry R. Richmond, "Rationale and Program Design," National Land Use Policy Institute, June 1994, 3.
2. Neal R. Peirce with Curtis W. Johnson and John Stuart Hall, Citistates: How Urban America Can Prosper in a Competitive World, Washington, DC, Seven Locks Press, 1993; William R. Barnes, Larry C. Ledebur, "Toward a New Political Economy of Metropolitan Regions," Environment and Planning: Government and Policy 9 (1991), 127.
3. William R. Barnes and Larry C. Ledebur, Local Economies: The U.S. Common Market of Local Economic Regions, Washington, DC: National League of Cities, August 1994.
4. Henry G. Cisneros, Regionalism: The New Geography of Opportunity, Washington, DC: U.S. Department of Housing and Urban Development, March 1995.
5. See, for example, "Cities: Many-Splendoured Things," Economist, July 29, 1995.
6. Larry C. Ledebur and William R. Barnes, All in it Together-Cities, Suburbs, and Local Economic Regions, Washington, DC: National League of Cities, February 1993, 4-8; Richard Voith, "City and Suburban Growth: Substitutes or Compliments?" Federal Reserve Bank of Philadelphia Business Review (September/October 1992), 21-33.
7. William R. Barnes and Larry C. Ledebur.
8. Mark Alan Hughes with Julie E. Sternberg, The New Met

ropolitan Reality: Antipoverty Strategy Where the Rubber Meets the Road, Washington, DC: The Urban Institute Press, 1992.
9. Anthony Downs, New Visions for Metropolitan America, Washington, DC: Brookings Institution, 1994.
10. Margery Austin Turner, Raymond J. Struyk, and John Yinger, Housing Discrimination Study: Synthesis, Washington, DC: U.S. Department of Housing and Urban Development, 1991.
11. For example, in 1990, more than half of blacks in the metropolitan areas of Chicago, Philadelphia, Detroit, St. Louis, Baltimore, Cleveland, Memphis, and Buffalo lived in neighborhoods that were at least 90 percent black. Reynolds Farley, "Neighborhood Preferences and Aspirations Among Blacks and Whites," in Housing Markets and Residential Mobility, G. Thomas Kingsley and Margery Austin Turner, eds., Washington, DC: The Urban Institute Press, 1993.
12. Douglas S. Massey and Nancy Denton, American Apart heid: Segregation and the Making of the Underclass, Cambridge: Harvard University Press, 1993.
13. William Julius Wilson, The Truly Disadvantaged: The Inner City, The Underclass, and Public Policy, Chicago: University of Chicago Press, 1987.
14. Community for Economic Development, Rebuilding Inner-City Communities: A New Approach to the Nation's Urban Crisis, New York, 1995, 15.
15. Margery Austin Turner, Michael Fix, and Raymond J. Struyk, Opportunities Denied, Opportunities Diminished: Racial Discrimination in Hiring, Washington, DC: Urban Institute Press, 1991; and H. Cross, G. Kenney, and W. Zimmerman, Employer Hiring Practices: Differential Treatment of Hispanic and Anglo Job Seekers, Washington, DC: Urban Institute Press, 1990.
16. William H. Frey and Elaine L. Fielding, "Changing Urban Populations: Regional Restructuring, Racial Polarization, and Poverty Concentration," Cityscape 2 (1995), 1-66.
17. Ronald B. Mincy and Susan J. Weiner, "The Underclass in the 1980s: Changing Concept, Constant Reality," Washington, DC: The Urban Institute, July 1993.
18. John D. Kasarda, "Inner-City Concentrated Poverty and Neighborhood Distress: 1970 to 1990," Housing Policy Debate 4 (1993), 253-302.
19. Erol R. Ricketts and Isabel V. Sawhill. "Defining and Measuring the Underclass," Journal of Policy Analysis and Management 7 (1988), 316-25. Also see Edward L. Glaeser, "Cities, Information, and Economic Growth," Cityscape (August 1994), 9-48 for a theoretical discussion of how violence begets violence in distressed urban neighborhoods.
20. Henry R. Richmond, 10.
21. Janet Rothenburg Pack, "Poverty and Urban Public Expenditure," draft working paper, Philadelphia: Wharton Real Estate Center, University of Pennsylvania, February 1994.
22. Karen DeWitt, "Aging Towns Gain Cities' Problems," New York Times, February 26,1995, A18. Also see Charles

Lockwood, "Edge Cities on the Brink," Wall Street Journal, December 21, 1994, A14.
23. Edward W. Hill, Harold L. Wolman and Coit Cook Ford III, "Can Suburbs Survive Without their Central Cities? Examining the Suburban Dependence Hypothesis," HUD Roundtable, December 1994.
24. Michael E. Porter, "The Competitive Advantages of the Inner City," Harvard Business Review (May-June 1995), SS-71.
25. Edward E. Glaeser, 9-47.
26. For example, suburban companies obtained 53 percent of their actuarial accounting services and 71 percent of their legal services from central city firms. Alex Schwartz, "Corporate Service Linkages in Large Metropolitan Areas: A Study of New York, Los Angeles, and Chicago," Urban Affairs Quarterly (1992), 276-96.
27. For example, by Larry C. Ledebur and William R. Barnes: "Toward a New Political Economy of Metropolitan Regions," Government and Policy 9 (1993),127-41; All In It Together: Cities, Suburbs, and Local Economic Regions, Washington, DC: National League of Cities, 1993; and Local Economies: The US. Common Market of Local Economic Regions, Washington, DC: National League of Cities, August 1994. Also see H. V. Savitch, David Collins, Daniel Sanders, and John P. Markham, "Ties that Bind: Central Cities, Suburbs, and the New Metropolitan Region," Economic Development Quarterly (November 1993), 341-58; and Richard Voith, "City and Suburban Growth: Substitutes or Complements?" Business Review, Federal Reserve Bank of Philadelphia 3 (September/October 1992), 21-33.
28. Larry C. Ledebur and William R. Barnes, Metropolitan Disparities and Economic Growth, Washington, DC: National League of Cities, August 1993.
29. Henry R. Richmond, 7.
30. The U.S. spends substantially more per capita for commuting costs than other industrialized nations do. For example, per capita vehicle travel in the U.S. is about twice that in Europe and Japan; and 15-IS percent of our gross national product goes to transportation, compared to only 9 percent in Japan. Between 1990 and 2005, traffic congestion is expected to more than quadruple, resulting in an estimated productivity loss of $58 billion per year. Henry R. Richmond, 24. Also see Bank of America, "Beyond Sprawl: New Patterns of Growth to Fit the New America," pamphlet, 1995.
31. Council of Great City Schools, National Urban Education Goals 1992-3 Indicators Report, xi.
32. To illustrate, one in four graduates of the Chicago public school system read at no more than the sixth grade level, and the average reading scores among black 17year-olds from poor urban neighborhoods are about the same as the scores for white 13-year-olds from betteroff school districts. George E. Peterson, Confronting the Nation's Urban Crisis: From Watts (1965) to South Central Los Angeles (1992), The Urban Institute: Washington, DC, 1992.
33. Citizen's Commission on Civil Rights, Civil Rights at a

Crossroads, citing testimony of Professor Gary Natriello, in Sheffv O'Neill, December 30, 1992.
34. Ina V. S. Mullis, Jay R. Campbell, Alan E. Farstrup, NAEP 1992: Reading Report Card for the Nation and the States, National Center for Education and Statistics, Report No. 23-ST06, September 1993.
35. Edward W. Hill, Harold L. Wolman, and Coit Cook Ford III. Also see School Enrollment-Social and Economic Characteristics of Students (October 1993), Table 2.
36. Robert D. Putnam, "Bowling Alone," Journal of Democ-

racy 6 (January 1995), 65-78; William Julius Wilson, The Truly Disadvantaged, Chicago, IL: University of Chicago Press, 1987; and John Parr, "Civic Infrastructure: A New Approach to Improving Community Life," National Civic Review 82 (Spring 1993), 93-100.
37. Committee for Economic Development, 29.
38. Katherine S. Newman, "What Scholars Can Tell Politicians About the Poor," Chronicle of Higher Education, June 23, 1995, B2.
39. Committee for Economic Development, 3.

[Author note]
Stegman is the Assistant Secretary for Policy Development and Research, and Turner is the Deputy Assistant Secretary for Research in the U.S. Department of Housing and Urban Development.

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